Texas Eastern Transmission, L P

Seventh Revised Volume No. 1

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Effective Date: 11/16/2009, Docket: RP10-53-000, Status: Effective

Third Revised Sheet No. 561 Third Revised Sheet No. 561

Superseding: Second Revised Sheet No. 561

GENERAL TERMS AND CONDITIONS

(Continued)

(6) All quantities tendered to Pipeline and/or taken by Customer under any Rate

Schedule other than under Rate Schedule SCT, on a daily basis in violation

of Pipeline's Action Alert or OFOs shall constitute unauthorized receipts

or deliveries for which the applicable Action Alert or OFO penalty charge

stated below shall be assessed.

(a) Action Alert penalty charge for each Dekatherm of Gas by which

Customer or point operator deviated from the requirements of the

Action Alert equal to an Action Alert Index Price calculated as 110%

of the daily Gas Daily posting for the Day on which the deviation

occurred for the high "Common" price for the geographical region, as

defined in Section 8.5(A) of the General Terms and Conditions, in

which the deviation occurred, multiplied by the quantity by which

the Customer or point operator deviated from the requirements of the

Action Alert.

(b) OFO penalty charge for each Dekatherm of Gas by which Customer or

point operator deviated from the requirements of the OFO equal to an

OFO Index Price calculated as three (3) times the daily Gas Daily

posting for the Day on which the deviation occurred for the high

"Common" price for the geographical region, as defined in Section

8.5(A) of the General Terms and Conditions, in which the deviation

occurred, multiplied by the quantity by which the Customer or point

operator deviated from the requirements of the OFO.

Upon an OFO becoming effective as specified in the OFO or as provided in

Section 4.3(A)(1) of the General Terms and Conditions, Customer, TABS

Party, OBA Party or point operator shall be permitted three (3) hours, or

such lesser time as is required to prevent the impairment of reliable

service, to reduce its tenders or takes in compliance with the OFOs. If

Customer adjusts its tenders or takes within such notice period based on

operational data, then no charge, as provided for herein, shall be

assessed.

(7) Any Action Alert or OFO penalty revenue collected by Pipeline pursuant to

this Section 4.3 shall be credited to those Customers that did not incur

Action Alert or OFO penalties pursuant to this Section 4.3 in the Month for

which Action Alert or OFO penalty revenues were received ("Non-Offending

Customers"), based on the ratio of the Reservation and Usage Charges paid

during that Month by the Non-Offending Customer to the Reservation and

Usage Charges paid during that Month by all Non-Offending Customers. Such

credits shall be calculated for each Month of the twelve (12) Month period

ending August 31 of each year, and will be included on the Non-Offending

Customer's invoice for the Month following the date of the final

Commission's order approving Pipeline's penalty disbursement report;

provided however that Pipeline will calculate and include such credits on

Non-offending Customers' invoices for a period shorter than twelve Months

in the event and to the extent that the total accumulated amount of Action

Alert or OFO penalty revenue collected pursuant to this Section 4.3 by

Pipeline as of the end of any Month exceeds $1,000,000. Pipeline will file

a penalty disbursement report within sixty days of August 31 or sixty days

after the end of the Month for which revenue collected exceeds $1,000,000.

Any penalty revenue credited to Non-Offending Customers pursuant to this

section shall include interest calculated in accordance with Section

154.501 of the Commission's regulations.